1 Risk-based Information Sharing Approaches to Supply Chain Security and Visibility Department of Investigation, Directorate General of Customs, Ministry of Finance, Taiwan

Outlines 2

Forward Variety types of codes for cargo transportation information according to individual management systems. The information become invisible when the cargoes depart from control area. Invisibility raises potential risk to border security and additional cost to stakeholders 3 The invisibility and its influence

4 The developing trend In 2005, WCO released SAFE framework defined two pillars of relationship, Customs to Customs and Customs to Business. In 2009, APEC regional economic integration (REI) defined three areas (at the border, behind the border and across the border) of key work priorities for supporting and accelerating the regional economic integration. In 2010, APEC initiated Supply Chain Connectivity Initiative (SCI) to the development of Eight Action Plans for eight logistics chokepoints. SCI also encourage cooperation between public and private sectors to develop efficient supply chain model. Forward

Customs Risk Management Mechanism To achieve the balance between the trade security and trade facilitation, it is crucial to build the cross-border platforms and share the high-risk and low-risk container movement information instantly. 5

Customs Risk Management Mechanism High-risk containers –In general, the export container has shorter inspection time. The inspection ratio for export containers is much lower than import containers. –In consideration of logistic flow efficiency, the export containers are considered as potential- risked, but has no evidence to violate the relevant laws of export economics, or has no enough time for detail inspection, could be affixed with RFID e- Seal and notice next Customs through the information sharing platform. The local Customs can analyze the pre-interchange information for the purpose of further inspection. 6

Customs Risk Management Mechanism Low-risk containers –The AEO containers are affixed with RFID e-Seal at the factories. When they arrive at the border, the Customs scan the e-Seals, verify the relevant information, and release the containers. –When they arrive the destination country, the local Customs could release the container after scanning the e-Seal and verify the relevant information over the cross-border platform. –Develop a safe and green path for cross-border movement of cargo to enhance the customs clearance efficiency. 7

Cross-border Container Information Sharing Platform Unity code to identify cargo –In consideration of conformity, a unanimous, standardized number as a key to retrieve relevant data is necessary to seamless connect every links in the end-to-end supply chain. Information and communication technologies (ICTs) for container identification, transportation tracking and information sharing. 8 Two things we needs to build the platform

B E A D F C Active e-Seal Passive e-Seal Semi- active e-Seal Discovery & Authentication Data Repository Information Capture Information Query ISO ISO ISO ISO EPC C1G2 Middleware Information Carrier EPCIS Not Specified (draft) Cross-border Container Information Sharing Platform

10 Item Pallet, crate, vessel Consignment Pallet, crate, vessel Item GTIN SSCC GSIN UCR Last digit of calendar Country or territory of export Company (Supplier) ID Internally applied +++ Consignment Level Cross-border Container Information Sharing Platform

Mapping table for different coding over internet 11 Code A Transform/Map ping over Secured Networks Code C Code B Code D XML Self-definition Autonomy Encrytion/ Authentication Standardization

– Starts From 2009 to – Implementation scope including import, export, transit and transshipment containers. – Uses information and communication technologies. – Provides a feasible solution to balance facilitation and security. – Proposes cross-border cooperation plan for supply chain connectivity. Case Study The cargo movement security subproject 12

Case Study RFID e-Seal Information processing Information sharing platform Technologies we used 13

Two Operational Scenarios of RFID e-Seal Case Study 14

RFID Handset Real Time Warning CCD Camera Barcode Scanner Active e-Seal Passive e-Seal 3G/WiFi Wireless Communication Case Study 15

RFID Lane in Container Yard DVR OCR: Car plate No. Recognition OCR: Car plate No. Recognition OCR: Container No. Recognition OCR: Container No. Recognition ICR: Image Characteristic Recognition ICR: Image Characteristic Recognition Passive RFID e-Seal Reader & Antenna Passive RFID e-Seal Reader & Antenna LED Signal Barcode Scanner Barcode Scanner Infrared Triggers Case Study 16

Nonstop Fast Lane in Harbor Gateway Fixed RFID Reader (for driver identification) OCR Cameras (for car plate number identification) OCR Cameras (for container number identification) Infrared Triggers Fixed RFID Reader (for passive e-Seal) LED Display Board DVR & ICR Camera: (Image Characteristic Recognition) Case Study 17

Surveillance TV Real Time Warning and Alarm Devices Monitoring Synchronized Display of Comparison Results of RFID Lanes Container Status from Customs Clearance Systems Instant Log of Container Notes Monitoring Center in Taichung Customs Office Case Study 18

Active e-Seal In-transit real-time tracking and warning – GPS function – 3.5G communication modules AES 128 bits encryption Quick and easy to install and unlock Case Study 19

Green Channel 1 Keelung Harbor Taipei Harbor Distance : 51.6 km Case Study

Airport Security Area Ever Terminal Distance : 4.7 km Green Channel 2 Case Study

Kaohsiung harbor (2012) Taichung harbor(2010) Taoyuan internal airport (2011) Taipei Harbor (2011) Keelung harbor(2011) 286 RFID handsets deployed in 118 monitor areas 110 RFID lanes (for passive e-Seal) 2 green channels (for active e-Seal) 1 control center in headquarters and 4 control offices in local Customs Passive e-Seal System Cargo Risk Control System(2012) Active e-Seal System Case Study

Cross-border Control A cross-border information exchange platform is essential to the Customs. The platform can provide critical or important information for Customs to ascertain the lowest risk containers such as AEOs’ and provide speedy clearance environment, and target the highest risk containers. Case Study 23

The Cross-border Pilot Project Chinese Taipei Customs initiated the cross-border pilot project in January The 7th Kuala Lumpur-Taipei Trade and Investment meeting held in April recognized Chinese Taipei’s proposal for bilateral cooperation in the use of RFID e-Seal between Malaysia and Chinese Taipei. The meeting of the Cooperation and Cross-Border Pilot Project on RFID E-Seal between Malaysia and Chinese Taipei for further discussion on the cooperation issues, was held in May Case Study 24

Two-Stage Test Plan Stage 1: CY to CY test The end-to-end test is limited to the container yards that Customs can commence. The containers affixed with e- Seals are verified at the check points. The information exchanged between two sides is limited. Stage 2: Trader-to-trader test The container movement along the entire supply chain is logged and traceable. Enterprises with good reputation are encouraged to join the trader- to-trader test. The containers movement along the end-to-end supply chain are traced and tracked by the above- mentioned platform. Case Study 25

Case Study The container movement were logged and tracked in the cross-border platform 26

Achievements 1 Validation and justification of the RFID e-Seal in container movement security of end-to-end supply chain. 2 The speedy clearance and transnational green lane concepts raised in this project are workable and feasible. 3 By way of promotion of transnational cooperation, AEOs could enjoy the privilege of facilitated clearance at the import countries. Case Study 27

Cross-border platform is essential for risk- management. Cross-border cooperation should be conducted by the agencies that in charge of border security, such as Customs. The cross-border platform should be conducted and implemented under APEC multilateral cooperation model. Conclusions 28

THANK YOU 29